UPDATE (NOVEMBER 2016):
Seeing how some people in Hong Kong are living in apartments ranging from 150 square feet to 200 square feet in size makes me feel like I am living in luxury!-----------------------------

I keep telling people that my home is a hut in the sky. It is a tongue in cheek way of saying I live in a high floor shoebox apartment. Yup, it is one of those apartments smaller than 50 sq m (538 sq ft) in size described by the ex CEO of CapitaLand as "inhuman". Of course, he was not the only one who had something negative to say about shoebox apartments.

To be quite honest, I was a sceptic too. My old place was almost 1,000 sq ft in size, had two bedrooms, two bathrooms, a big kitchen, a big living area and a balcony. Almost everyone who visited told me then that it was a perfect size bachelor pad.At the time, I already had friends staying in shoebox apartments and I knew what a 463 sq ft apartment looked like. The first word that came to mind when I visited the place was "tiny". Space was tight. In between furniture and fixtures, there was only enough space for one person to walk around. Well, maybe two if the people were smaller in size.

Tiny!

So, it was a leap of faith for me to buy a shoebox apartment more than two years ago and, to be quite honest, I was somewhat worried about the space issue after the whole deal went through. I made copies of the floor plan of the apartment and made scaled measurements of furniture, exploring different ways of making everything fit while still having enough room to move around.Now, having lived in a shoebox apartment for a while, I find that they are, actually, very livable. The trick is not to clutter up the apartment with stuff. Staying in a shoebox apartment makes people think more carefully about what they buy for their home. The question "Is this necessary?" takes on another layer of importance.﻿

Kitchen is in the living room? Yup!

For me, the necessary furniture to buy in a shoebox apartment would be:1. A bed.2. A wardrobe.3. A sofa.4. A desk and two chairs.5. A TV console.Depending on the size and layout of the shoebox apartment, smaller size furniture might have to be considered. However, if the apartment is not smaller than, say, 441 sq ft, and the format is not oddly shaped, pretty decent size furniture, including a queen size bed and a two seater sofa should be able to fit quite comfortably.I have learned to appreciate that living in a shoebox apartment has many advantages and, strangely, although I had much more space in my old place, I do not feel that my current home is less livable. Let me see if I can rattle off a list of things.

Tiny apartments are the norm in Japan.

The first thing that comes to mind is that there is less underutilised or wasted space. I had lots of space in my old place but most of it was underutilised. When I sold it after staying there for more than 4 years, I remember that the kitchen was in an almost pristine condition.There is less cleaning to do in a shoebox apartment which saves me a lot of time. I remember that a thorough cleaning of my old place, including the underutilised kitchen, took me almost 6 hours! The shoebox apartment takes me less than 2 hours to clean.Financially, the shoebox apartment is less burdensome as it was much cheaper to buy and I also pay less in property tax. We always hear people saying Singaporeans are asset rich but cash poor. Although not always the case, many people "over consume" when it comes to their homes. Real estate can be good investments for income but, unless we have and are willing to rent out spare rooms, our homes are consumption items.I enjoy equal access to the facilities in the condominium which includes the car park but I pay much lesser in monthly maintenance fee compared to my neighbours who bought the larger units in the condominium. Of all the facilities available, why did I mention the car park? Isn't that the most boring thing on the list?Well, I remember telling some friends that considering the fact that a car park lot is about 100 sq ft in area, I got a pretty good deal since bigger units are also entitled to only one car park lot each. Proportionally, a 441 sq ft apartment would gain 22.6% more space while a 1,034 sq ft apartment would gain only 9.7% more space, for example. Interesting, isn't it?﻿

I thought this was somewhat extreme.

Anyway, although we might feel unhappy with the rising costs of living, as long as Singapore's economy chugs along nicely, things will only become more expensive over time. So, apartments will become more expensive too. Smaller formats are more affordable, for sure, but beyond affordability, many are concerned about whether they would compromise on the quality of life.If we believe that a HDB 4 room flat, 970 sq ft in size and has 3 bedrooms, is about right for a family of 4 or 5, then, each person in the family would have 242.5 or 194 sq ft of space, proportionally. A shoebox apartment that is 441 sq ft in size would, therefore, provide plenty of room for a single person or even a couple. It is all relative, isn't it?Finally, I have been watching a program called "Tiny House Nation" recently. This is a movement in the USA and we all know how the Americans love their big houses. I remember a friend from the USA told me that a 1,300 sq ft apartment was tiny for a family of 5 when I was staying with my parents in an apartment which was about that size.Anyway, I really enjoy watching "Tiny House Nation" and to learn that more Americans are downsizing, being less wasteful and more environmentally conscious.

Actually, you could still do that. Get a very comfortable couch and one that converts into a bed when required. ;)

In fact, my sofa is more comfortable to sleep in than the bed in my old place. The cushions are made of memory foam. Before my bed arrived in my new place, I slept in it for a few nights. It is a 1.9m long 2 seater. Long enough. :)

A 1,000 sq ft or so unit in the same condominium would have have cost about 10% less on a per square foot basis. But its absolute dollar price tag would have been more than double that of my shoebox unit's.

I kind of rationalised back then that it would make more sense to buy 2 shoebox units, rent one out for income than to buy a bigger unit and rent out a room. I would also have the flexibility of selling one unit in future, retaining one for my own stay. As much as I loved my old home, I couldn't keep half of it and sell the other half. ;p

I value privacy a lot and don't like to share living space with a stranger although I was lucky enough to rent out my spare room in my old place to a friend before. :)

So, based on my calculations, there really is not much of a price difference between shoebox units and larger units in my condominium on the same floor although on the face of it, on a psf basis, there is a 9% to 10% difference. This might not be the case, however, with some other condominiums which could see a price difference of 20% or more in some cases.

Nice post. Thanks for the reminder that property that you are staying in is really a consumption item and not am investment. It is my goal to minimize consumption of housing too. I think it would be a good exercise to declutter my life too and live a minimalist lifestyle. Hopefully I can own my own shoebox soon :)

If you are looking for one in the CCR or RCR, I think the prices will retreat some 15% over the next two years from where they are now and this is really because of the impact of falling rentals and heavier financing burden from rising interest rates.

I feel that the shoeboxes that will be impacted the most will be the ones priced at the higher end of the spectrum which, to me, are those which cost around $2,000 psf or more. The reason is because of the total quantum.

Most people buy shoebox apartments as investments and if the purchase price was lower, the probability of these buyers being able to continue servicing their loan is higher even if rentals were to fall or, worse, if the apartments should be vacant for a few months in a row.

Of course, I am ignoring the holding power of these landlords which is a variable component in the whole equation. Some might have deeper pockets. Ignoring this possibility, however, I think my expectation is reasonable.

Shoebox apartments which are below $1,500 psf in price will probably be more resilient, bearing in mind that rentals in RCR have been more resilient compared to CCR, but I am sure there will be some distressed sellers as well in the next couple of years.

I feel that a shoebox apartment of around 441 sq ft is livable for a single of a couple. I don't know what a shoebox apartment in the 200+ or 300+ sq ft is like. So, I really cannot comment.

If there should be an offer of $1,200 to $1,300 psf for a 441 sq ft unit, that would mean a price tag of $529,200 to $573,300 which I feel is affordable for most PMETs in their early or mid 30s. At below, $1,200 psf, I think there will be a ready market of buyers.

However, you want to keep an eye on value for money as, more often than not, it is quite relative.

Wow, thanks so much for the comprehensive reply! Really grateful for all the nuggets of wisdom there. Yes, I think around 450-600 sqft would be a nice size for a couple to live in. Will try to be more patient and bide my time for prices to fall, and meanwhile start scouting around. Thanks AK for being so generous with your time and knowledge :)

Reader:I like most of the stuff you blog about but encouraging people to go tiny is not something I agree with. It might be OK for you because you are single but, hey, don't you have friends or family who visit? Are you really happy living in a tiny apartment? Have you ever thought that you made a mistake? I am really curious.

AK:I don't usually entertain. I don't like cleaning up after a party. I am lazy. That is also a reason why I love my little hut in the sky. Less square footage, less cleaning. It has been more than 2 years and I still love the place. No, I don't feel like I have made a mistake. Not the size. Not the price. Not the location. Not anything. I think my little hut is perfect. :)

Wisdom to tap on.

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